Was EB-5 Extended by Congress? Lawsuit Asks Federal Court to Decide

By David North on October 8, 2016

The clouds over the legislative extension, or non-extension, of the EB-5 (immigrant investor) program darkened a bit Friday as a Texas non-profit organization asked a federal court to order the Department of Homeland Security to halt all EB-5 operations. The previous authorization for the program ran out on September 30.

Congress may or may not have legislated a brief extension of the main part of the EB-5 program (the granting of a set of immigrant visas to aliens putting half a million dollars into a DHS-sanctioned, but not guaranteed, investment) as we noted earlier. The industry and the government think that the continuing resolution passed by the Congress kept the program alive until December 9, but lawyers at the Congressional Research Service, an arm of the Congress, thought otherwise.

Friday's development, which may or may not lead to a resolution of the matter, was a complaint filed by Urban Equality Now, a Texas-based non-profit in the U.S. District Court of North Texas.

The complaint, filed by Dallas lawyer Michael E. Coles, demanded that "in the absence of demonstrated congressional intent to extend" EB-5, that DHS be barred from continuing to operate the program. It called from the invalidation of any decisions related to the program made after October 1.

Urban Equality Now is an organization that wants, as its name implies, EB-5 moneys to be distributed more equitably in the nation, as opposed to the current pattern, which is to put most of the investments in posh downtown areas of a handful of big cities.

The sheer incompetence of the EB-5 lobbyists and the industry in failing to secure a clear-cut extension of the program is reminiscent of the governmental mal-administration of the program, and the frequency with which fraud and failures mark the ventures funded by it.

The full text of the complaint can be seen on the PACER electronic file systems as case 3:16-cv-02837-N.